Bid price in forex trading explained
By Ken Chigbo, Founder, KenMacro. Published 2026-05-13.
Quick answer
The bid price is the rate at which a broker or market maker is willing to buy the base currency from a client. In any forex quote, the bid sits on the left, below the ask. When a trader sells a pair, the order fills at the bid. The gap between bid and ask is the spread.
What is bid price?
The bid price is one half of a two-sided forex quote and represents the highest price a counterparty is willing to pay for the base currency at that moment. If EUR/USD is quoted at 1.0850 by 1.0851, the 1.0850 figure is the bid. A retail client selling EUR/USD transacts at the bid, because the broker is buying the euros from them. The bid reflects real-time order flow on interbank venues such as EBS and Reuters Matching, filtered through liquidity providers to the broker. It updates continuously as buy interest changes.
How traders use bid price
Retail traders interact with the bid every time they close a long position or open a short. On most platforms the price chart defaults to the bid line, which means sell orders execute at the visible price while buy orders fill slightly higher at the ask. Institutional desks use bid depth on the order book to gauge how much size can be sold before the price walks lower. Widening between bid and ask, often seen around major data releases such as US non-farm payrolls or ECB decisions, signals reduced willingness to absorb sell flow. Scalpers and high-frequency strategies are especially sensitive to bid quality, because every round trip pays the spread. Choosing a raw-spread account routes orders to tighter bids closer to interbank levels.
Worked example of a bid price fill
Assume a trader holds one standard lot of GBP/USD bought earlier at 1.2700. The current quote is 1.2750 by 1.2751. To close the position, the trader sells at the bid, 1.2750, not the ask. The realised profit is 50 pips, calculated against the bid because that is where the broker buys the pounds back. If the trader had reversed and opened a short instead, that order would also have filled at 1.2750, with a stop or target then measured from the bid going forward. The ask only becomes relevant again when the short is eventually covered.
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Frequently asked
Why is the bid price always lower than the ask price?
The bid sits below the ask because the market maker or liquidity provider needs to be compensated for taking the other side of the trade and holding inventory risk. The gap, known as the spread, is the cost of immediacy. If bids matched asks, there would be no profit margin for anyone quoting two-sided prices. In deep, liquid pairs such as EUR/USD the gap is fractions of a pip, while in exotic crosses it can run several pips wide.
Do I sell at the bid or buy at the bid?
You sell at the bid. The bid is the price the broker is willing to pay to buy the base currency from you, so it is the price you receive when you initiate a sell order or close an existing long position. Buy orders, whether opening a long or covering a short, fill at the ask price, which is higher. This is why every round-trip trade starts at an immediate spread cost equal to the difference between the two.
Does the bid price include broker commission?
Not directly. The bid is the raw price at which the broker or its liquidity providers will buy the base currency. On standard accounts, the broker often marks up the bid down and the ask up, embedding their fee inside a wider spread rather than charging a separate commission. On raw-spread or ECN accounts the bid stays close to interbank levels and a commission is added per lot at execution. Either model produces a transaction cost, just structured differently.
Why does the bid price move even when I am not trading?
The bid updates constantly because it reflects aggregated buy interest from banks, funds, and other liquidity providers across the global market. As new buy orders arrive or existing ones are cancelled, the highest standing bid changes. Macro news, central bank commentary, and large institutional flows can shift the bid sharply within milliseconds. Even in quiet sessions, algorithmic market makers adjust their quotes continuously to manage inventory and respond to correlated assets such as bond yields or equity indices.
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